Federal Judge Blocks $25 Billion Kroger-Albertsons Grocery Merger
The New York Times
The Federal Trade Commission notched a victory in its efforts against the supermarket merger, which it sought to block over concerns about harm to shoppers and workers.
A federal judge on Tuesday temporarily blocked what would be the biggest grocery store merger in U.S. history, siding with the Federal Trade Commission in its lawsuit seeking to halt the deal.
The preliminary injunction issued by Judge Adrienne Nelson marks a win for federal regulators who have argued that Kroger’s $24.6 billion acquisition of Albertsons, a rival grocery chain, would risk reducing competition at the expense of consumers and workers.
Her ruling, which came about three months after a hearing that featured testimony from top executives and economic experts, put the merger on shaky ground as it heads to the F.T.C.’s internal administrative process, which could determine the fate of the deal. The two companies are also defending the merger in two other lawsuits filed in state courts.
The companies could choose to abandon their merger because of the preliminary injunction, but the order “in no way forces them to do so,” Judge Nelson said in her decision, stressing that the companies could still pursue the deal if it is deemed lawful in the F.T.C.’s administrative proceedings. “An injunction simply pauses the merger,” she said.
The combination of the country’s two largest supermarket chains would create a $200 billion company, with about 5,000 stores in 48 states and the District of Columbia. The F.T.C. filed an antitrust lawsuit in federal court in Portland, Ore. to block the merger, about a year and a half after it was announced. The F.T.C. was joined by the attorneys general of eight states, including California and Illinois, and the District of Columbia. It was part of a regulatory push under the Biden administration to rein in corporate consolidation in an array of industries, including airlines, Big Tech, book publishing and pharmaceuticals.
Judge Nelson’s decision “protects competition in the grocery market, which will prevent prices from rising even more,” Douglas Farrar, a spokesman for the F.T.C., said in a statement. “This statement win makes it clear that strong, reality-based antitrust enforcement delivers real results for consumers, workers and small businesses.”
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